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Mommygate—The Potential Ethical and Economic Fallout from Using Home Workers to Conduct Verifications
It is difficult to believe, but even as the information and screening industry is under intense public and Congressional scrutiny for failure to protect confidential and personal consumer data, there are still screening firms that routinely send consumer data to at-home workers to perform employment and education verifications. These home workers are generally unregulated and unsupervised and have complete access to private consumer data in a completely unsecured environment.
Screening firms that utilize at-home operators to save money must ask themselves some questions to determine if it is really worth the perceived cost savings to risk their reputation, lawsuits and other fall-outs from using unregulated home workers. For example:
- Would a screening firm be willing to reveal to their clients that consumer data was being sent to private homes, and that verifications were being done by unsupervised home workers in an unsecured environment?
- Would a screening firm want to answer questions from reporters or FTC or Congressional investigators about their data privacy and protection practices in view of the fact that data is sent into private homes unregulated?
- What defenses would a screening firm use in jury trial, if sued for data theft (or even worse if the data is used to stalk or harm a consumer) due to unsupervised and unregulated home workers, other then it seemed like a good way to save money.
What is even worse is that in reality, the use of at-home operator may not even have the cost-savings advantages hoped for, and can in fact be a detrimental factor to the growth of a screening firm.
Some of the issues with at-home operators include:
Privacy concerns
In order to accomplish the work, the home operator is usually given the applicant’s data of birth and social security number. If data is stolen or misused by at-home workers, there is very little legal defense for a Consumer Reporting Agency (CRA). Since the operators are at home and beyond any supervision, a CRA has very little control over what happens to the data. Not only is there the potential for direct miss-use or theft of the data, but a CRA has no idea who is going in or out of the operator's home, what information is being left laying around on the kitchen table, what is being left on the computer, how passwords are protected if there is a computer system, who has access to the operators computer or a host of other risk factors.
Security There are security issues with at home operators. For example, the CRA does not know who is accessing the computer system, making the calls, entering data or if calls are even being made. A certain amount of auditing may reveal some abuse eventually, but not until the damage is done.
Training
Another vital issue is standardized training across all operators. With at-home workers, training is extremely difficult to conduct. In addition, since operators are working in isolation at home, the opportunity to catch and correct errors timely is lost. Nor can at home operators have the opportunity to learn from each other and develop additional expertise by interacting with co-workers to develop additional expertise.
Supervision and Quality Control
With at-home operators, it is difficult to implement quality control. There is nothing to prevent an at-home operator from just closing the orders or even "faking" data just to get a complete. Since the CRA does not know how much time the at-home operator spent on the phone, there is no way to run routine cross-checks or productivity reports that helps to assure quality control.
Real-time status updates
In a typical home worker situation, the worker is given a list of verifications to perform, and certain work rules. However, until the verification is complete, the CRA does not have status, nor can the CRA tell exactly who was called, when the call was made and the current status.
Due Diligence
The use of at-home operators raises significant legal concerns if a CRA is the subject of a lawsuit because of the reference process. A CRA could be sued if an at-home operator performs negligently, fakes a completion, steals data or uses the information to commit some violent crime against a consumer. A CRA would be a sitting duck in a lawsuit.
Uniform procedures across the organization
A recurring problem is whether verifications adhere to firm wide standards with unsupervised operator dealing with verifications at home. Ideally, a CRA should have consistent work rules in effect, such as the number of hard touches and soft touches that must be done per day, or before an order is closed. This becomes very difficult to enforce with operators spread out a homes across the country.
Standard of professionalism
Most CRA’s advertise in their marketing materials and web site that they are “professionals” providing a valuable service. The use of unsupervised and unregulated home workers as a cheap substitute for what is suppose to be a professional service can be inconsistent with the marketing message.
FCRA Compliance
An argument can be made that the use of unsupervised and unregulated at-home workers is also not defensible under FCRA sections 607(b) concerning reasonable procedures for accuracy.
b) Accuracy of report. Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.
The irony of course it that in reality, firms that use home worker to gain an economic advantage may not really get what they pay for. The true cost of at-home workers is probably more expensive then a screening firm assumes.
For example, time will be spent helping the operator administer at-home technology such as Internet connection, phone, fax, or printer. If their equipment or connection fails the orders don’t get done or have to be re-routed. Connection and equipment variables are multiplied by each individual operator.
With at home operators, the CRA must do constant "load balancing" since they never know from day to day who is available. At-Home Operators tend to give priorities to their own problems such as installing a new washing machine or baby sitting the grandchildren. A screening firm has much less control over an assured source of reliable work.
Management time spent supervising home operators and obtaining real-time updates must be calculated in the true cost. Training of remote operators requires additional time and technology to be highly effective on a continuous basis.
The result is that firms that think they are ahead with home operators may find the true cost price is much higher. Not only are home workers a limitation to growth, but the management headaches are typically much higher then a firm assumes. However, the real cost can be lawsuits, lost clients and permanent damage to a firm’s reputation if even one unsupervised home worker decides to do something crazy. For firms that are publicly traded, accepting venture capital or contemplating an IPO, the risk of using home operators make even less sense.
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